We sometimes have clients call to tell us that a current or ex-employee has stolen their business’ intellectual property to use for their own benefit or to help a competitor. Typically, they ask us what they can do (but not before exclaiming, help!). Tech can facilitate staff taking your company’s confidential client lists with a simple email. Below, we set out what steps employers should take to protect their business’ intellectual property and what remedies might be available. 

What Steps Can I Take to Protect My Business’ Intellectual Property?

Employment Contracts

At the outset of your business’s relationship with an employee, it is important to have an employment contract with a confidentiality clause. A confidentiality clause should clearly define what is confidential to the business as well as specific details relevant to the business.

Parting Ways

When a staff member resigns, is terminated or made redundant, this is a crucial time for the business to confirm the employee returns all information back to the company.

Electronic Protection

It may be prudent to invest in data leakage prevention software or use encryption technology to prevent others from receiving your data. As leaks may happen online, it can be a good idea to monitor emails.

What Remedies are Available?

If you discover that an employee is stealing your IP and has breached the explicit terms of the confidentiality agreement, you can take the following steps: 

  1. Terminate their employment by way of disciplinary action; or
  2. Seek a court order to prevent any future breaches of the confidentiality agreement; or
  3. Seek court orders against the employee who breached the order to recoup any monetary damages that the employee has caused the business. You should not approach this option lightly as litigation is costly with no guarantees. 

Copyright Infringement in Luxottica Retail Australia v Grant

In Luxottica Retail Australia v Grant [2009] NSWSC 126, an employee who resigned had sent 23 emails from her work address to her home email including training manuals. She did this after a competitor offered her another job as an optometrist. 

Luxottica sued the employee for breach of contract and copyright infringement. She was found to have breached her employer’s copyright because of a comprehensive confidentiality clause, prohibiting disclosure of confidential information. 

Interestingly, the Court did not think that it was a breach of contract to forward an email to a home address while still employed by the company. This was supported by the fact that she worked from home and frequently used her home email for work purposes.

The employee offered to remove her hard and electronic copies of copyrighted material. However, Luxottica pursued the matter and she was ordered to pay the nominal sum of $10 for breach of copyright. While the amount ordered to pay was minimal, the employers likely sought to deter other employees. 

In Short

Although you can pursue an employee through court if they take your business’ confidential information after their departure, it is more cost effective to protect your intellectual property at the outset. Have your employee read carefully their employment agreement before signing, and ensure that it includes a detailed confidentiality clause.

Questions? Let our employment lawyers know on 1300 544 755. 

Sophie Glover
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